Cloud Migration Cost-Benefit Analysis

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A cost/benefit analysis identifies the benefits and risks/costs to an organization for a given business decision.

Considerations for Cloud Migration

Reduction in Capital Expenditure

• physical devices are rarely fully utilized
• tax benefits for purchase of hardware must be accrued over years of operation as depreciation
• with paid cloud services, operational expenditure is tax deductible as an expense
• organization only pays for used services, no waste

Reduction in Personnel Costs

• managing data is not a core competency for businesses
  • it is a a specialized skill
  • IT hiring and training are expensive
• moving to cloud can reduce the number of personnel needed to managing infrastructure

Reduction in Operational Costs

• maintaining and administrating an internal environment is a large expense
• moving to cloud moves costs to price of service
  • costs are flat-rate and don’t increase in response to enhanced operations
    • e.g., scheduled updates, emergency response, etc.

Transferring Regulatory Costs

• CSPs may offer holistic, targeted regulatory compliance packages for customers
  • e.g., CSP applies a set of controls to customers cloud environment to ensure compliance with PCI
• decreases the effort and expense for a customer to create their own control framework and managing individual controls
• customer is still responsible for many aspects of regulations
  • if collecting PII, customer is responsible for any breaches even if using a CSP
• can transfer financial risk, but still responsible for regulatory/reputational risk

Reduction in Costs for Data Archival/Backup Services

• moving operations to the cloud can create economies of scale when combining with archiving and backup usage
• can lead to overall cost savings
• can enhance BC/DR strategy